But I have to agree with the AC here. This country used to be a world leader in science and technology. Think of the vast number of things that were invented here. However, investment in science and technology is a long term investment, and the political class rarely see beyond the four year re-election horizon. They aren't interested in the potential benefits if they fall beyond that timeline. The solution really is for funding to be properly decoupled from the influence of MPs, and handled, as it should be, by the research councils without interference from meddling politicians who are only after thier next vote.
As for peer review; yes, it is generally acknowledged that this isn't a perfect system, in much the same way that our voting system isn't perfect. I would ask you to suggest a better alternative to either that is generally acceptable. I remember reading somewhere an article about why a perfectly representative voting system isn't possible, the peer review system is good enough, has stood teh test of time, and is one of several checks and balances that keeps scientific research honest. Other checks include the need for reproducibility, ethics committees, and the unwillingness of funding bodies to give money to researchers who can't show that their work is serious and novel.
Having said that, the researches in the so-called 'climategate scandal' may have been guilty of being somewhat circumspect about releasing their data. You have to remember, however, that being human, they are not perfect, just like you and I, and most people wouldn't want to spend a significant portion of their working time pandering to nutjobs, adn lobbyists who are trying to undermine your work by grabbing your research data and selectively quoting the outliers.
The problem really isn't that science is dishonest; on the whole it is very much the opposite, but that human beings are dishonest, particulalrly those with vested interests. In this case, I'd put money on the MORE dishonest parties being the AGW deniers funded by large oil producers and their lobbyists.